Sock Safeguards Considered
When sock imports from Honduras jumped 50 percent last year, sock manufacturers in the United States grew nervous.
They saw their sock production drop 19.6 percent in 2006. It declined 13.5 percent in the first quarter of 2007.
Many are now asking the Bush administration to consider a special safeguard measure written into the Dominican Republic–Central America Free Trade Agreement. It allows the U.S. government to impose safeguards in the form of tariffs, ranging from 11.3 percent to 18.8 percent, on socks made in Central America.
The sock safeguard measure, effective for three years after the initiation of DR-CAFTA last year, was imposed to win votes to pass the free-trade agreement in Congress.
The free-trade agreement allows most goods between the United States, the Dominican Republic, Honduras, Nicaragua and Guatemala to flow freely without paying duties or being subject to quota restrictions. Costa Rica is still waiting to decide whether it will join DR-CAFTA. Residents are voting on the issue Oct. 7.
Several manufacturers in North Carolina, including the Renfro Corp. and Kayser-Roth Corp., have asked for the safeguard to be applied to cotton, man-made fiber and wool socks.
The U.S. Committee for the Implementation of Textile Agreements (CITA), the governmental agency that decides these matters, has until late November to decide whether to put pre–CAFTA level tariffs back on all Honduran sock imports. The committee stopped taking comments on the safeguard measures on Sept. 20.
Kevin Burke, chief executive of the American Apparel & Footwear Association in Arlington, Va., told CITA that his organization believes safeguard measures should only be used in extreme circumstances and only after consultation with key stakeholders fails to reach an agreement.
This would be the first safeguard measure imposed on members of DR-CAFTA since the free-trade agreement went into effect. —Deborah Belgum
